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IMPACT OF TEST MARKETING AND INNOVATION ON NEW PRODUCT

CHAPTER ONE

INTRODUCTION

1.1   BACKGROUND OF THE STUDY

Although product development is not usual recognized as a formal stage in the product life cycle, many ideas for long term product planning are derived from the concepts that are generated through the preliminary process. Product development is a strategy for company growth by offering modified or new product to current market segments. Before introduction, a new product in the market place will go through the eight distinct stages of the new product development i.e. idea generation, idea screening, concept development, marketing strongly, business analysis, product development, test marketing and commercialization.

Test marketing and innovation on new product are factors that needs to be weighted so as to avoid failure of such product in the current market segment. Up to this time reaction of potential buyers to the new product has not been tested under normal marketing conditions. Potential customers may have been asked to react to neither one or more product features and to comment on the packaging and advertising appeals.

Test marketing is the stage where the entire product and marketing program is tried out to for the first time in a small number of well chosen and authentic sales environments. While innovation is the act of developing a new process and introducing it to the market. It is essentially an entrepreneurial act, innovation means change; sometimes radical change, such as development of product and some incremental change such as modification of existing product features or component.

In either case, Unilever Nigeria plc management must develop process to encourage and guide the changes taking place since innovation generally stems from purposeful search for opportunities management guru peter Drucker identified that opportunities for innovation exist both within and outside a company or industry. Opportunities internal to a company include unexpected events, incongruities in processes or between expectation and result process needs and changes in the market place or industry structure opportunities external to a company include demographic changes in perception and new knowledge.

1.2   STATEMENT OF THE PROBLEM

The foregoing research findings suggests the impact of test marketing and innovation on new product growth and the important of gaining large market share. Consumer satisfaction rate and industrial competitive abilities. Test marketing and innovation of products made segmentation decision in regards to customers satisfaction highly important area of decision in Unilevers Nigeria plc. It aids product differentiation thereby limiting it to the current segment market.The problem could therefore include: i. The risk of new product failure or services. ii. Competitors from various and other companies constitute a risk. iii. Reduction in the profit level of Unilever product constitute another risk.

1.3   SIGNIFICANCE OF THE STUDY

This study is significant in the following areas:

a. The research findings will serve as a guide to Unilever Nigeria plc on matter relating to test marketing and innovation, consequently defines are where both could help the improvement of market strategy.

b. It will reveal the appropriate needs of the consumer on the product.

c. It will also reveal area of strength and weakness of Unilever Nigeria plc in the current market segment

d. To encourage unilever Nigeria plc to take cognizance, not only of competitive product market but customer/consumers satisfaction

e. To reveal more challenges that lies ahead and how to achieve the target objective on the new product.

f. To show the customer taste, purchasing power and wants for unilever product.

1.4   PURPOSE OF THE STUDY

The main purpose for this research topic i.e. the impact of test marketing and innovation on new product are:

i. to identify the stages involves in new product development.

ii. To consider the reason for test marketing a product

iii To asses the concept of innovation in the segmented market

iv. To find out why new product fail Or succeed?

v. To identify the strategies used by first adopters and compare with unilever Nigeria plc marketing strategies for new product.

v. Analysis of the business environment.

1.5   SCOPE OF THE STUDY

The scope of the study based on this research findings is limited to unilever Nigeria plc oregun Lagos.

1.6    LIMITATION OF THE STUDY

The major problems encountered that make the research work not be full are: Time constraints, inadequate data, academic work load, getting of modern textbooks and journal, and attitude of respondents.

1.7   HISTORICAL BACKGROUND OF THE UNILEVER NIGERIA, PLC

The company first came into existence in Nigeria and incorporated as a private company under the name “Lever Brothers West Africa Soap Company” went public in 1923. It subsequently changed its name to lever Brother limited in compliance with company and Allied matter decree of 1990. The company substituted the word “Limited” in the name with plc to become lever brother and its foots in the foods and drinks business by its merger with Lipton Nigeria limited in July 1985 and in the personal product industries limited in December 1988. Currently, Lever Brother Nigeria plc operates three factors which was commissioned in 1924. Ever since expansion has taken place it include the production of international toilet soap brands like Lux Astrial, Asespo, and rewards, in addition to sops, personal product such as pepsodent, close-up tooth paste and petroleum jellies are also produced. It should be noted that in September 2001, the name Lever Brother Nigeria plc was changed to unilever Nigeria plc.

1.8   DEFINITIONS OF TERMS

Product Fiasco:- Product failure in its entirety design performance and contribution.

Product Diffusion: This is the spread of a new product from its sources of invention to its ultimate user or adopters.

Product Line:- This describes a group of product intended for essentially similar uses and processing reasonably similar physical characteristics.

Market Probe:- Market investigation i.e. Test marketing amount to reality in a market investigation.

New Product:- May be defined as any product idea currently made a marketed by a company or which the customer may perceive as new.

Innovations:- This are often venture some and like to be different, they are willing to take a chance with an untried product.

Business Analysis:- This involves turning the idea into a concrete business proposal. The management tried to identify product features, estimate demands, cost benefits analysis, determine product profitability and assigns responsibility for further study of the product feasibility.

Product Development:- Here, it involves gear up production and a workable marketing programme for the new product. The idea on paper is converted into a physical product. Prototype or sample product are made as specified, subject to laboratory and other technical evaluation to ascertain the productivity feasibility.

Survival:- This refers to when a company is faced with changing consumer taste, intense competition and over capacity it must keep price low and innovate new product in order to keep the company going and maintain efficient inventory. Profit is not particularly important. The attempt to covers variable cost and some finished cost until things pick up again.

1.9 RESEARCH QUESTION

The following research question helps to guide this research work.

i. In what ways do test marketing and innovation affect the new product?

ii. What is the importance of test marketing and innovation to unilever Nigeria plc productivity

iii. Is there any significant difference between tested product and non-tested product?

iv. Is test marketing and innovation the yardstick to new product survival?

v. How many test cities was used by unilever Nigeria plc?

vi. How long did test marketing and innovation run?

vii. How does the new product gets to the hands of the customers?

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